Filed Pursuant to Rule 424(b)(3)
Registration No. 333-118457
PROSPECTUS
RAMP CORPORATION
110,741,046 Shares of Common Stock
This prospectus relates to the sale by the selling stockholders identified
in this prospectus of up to an aggregate of 110,741,046 shares of our common
stock, including:
o 32,341,046 shares of our common stock;
o 20,400,000 shares issuable upon the conversion of promissory notes
with an initial conversion price of $0.30 cents per share;
o 14,000,000 shares issuable upon the exercise of warrants with an
exercise price of $0.11 cents per share;
o 14,000,000 shares issuable upon the exercise of warrants with an
exercise price of $0.15 cents per share;
o 2,000,000 shares issuable upon the exercise of warrants with an
exercise price of $0.18 cents per share.
o 14,000,000 shares issuable upon the exercise of warrants with an
exercise price of $0.35 cents per share; and
o 14,000,000 shares issuable upon the exercise of warrants with an
exercise price of $0.40 cents per share.
The conversion price of the promissory notes and the exercise price of the
warrants are subject to adjustment under certain circumstances. Please see the
sections of this prospectus titled "Description of the Transactions", "Plan of
Distribution" and "Description of Our Securities" for more information about the
terms and conditions of our common stock, promissory notes and warrants.
We will not receive any of the proceeds from the sale of these shares by
the selling stockholders. However, we will receive the proceeds from any
exercise of warrants to purchase shares to be sold hereunder. See "Use of
Proceeds".
We have agreed to pay the expenses in connection with the registration of
these shares.
Our common stock is traded on the American Stock Exchange under the symbol
"RCO". On September 20, 2004, the closing price of our common stock was reported
as $0.04 cents per share.
Investing in our securities involves a high degree of risk. See "Risk
Factors" beginning on page 5 of this prospectus for certain risks that should be
considered by prospective purchasers of the securities offered hereby.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is September 28, 2004.
TABLE OF CONTENTS
Page
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PROSPECTUS SUMMARY............................................................3
RECENT DEVELOPMENTS...........................................................4
RISK FACTORS..................................................................5
FORWARD-LOOKING STATEMENTS...................................................15
USE OF PROCEEDS..............................................................15
DESCRIPTION OF THE TRANSACTIONS..............................................15
SELLING STOCKHOLDERS.........................................................18
DESCRIPTION OF SECURITIES....................................................22
PLAN OF DISTRIBUTION.........................................................23
INDEMNIFICATION OF OFFICERS AND DIRECTORS....................................25
WHERE YOU CAN FIND MORE INFORMATION ABOUT US.................................25
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE............................26
LEGAL MATTERS/INTERESTS OF COUNSEL...........................................27
EXPERTS......................................................................27
2
PROSPECTUS SUMMARY
The following summary highlights aspects of the offering and the
information incorporated by reference in this prospectus. This prospectus does
not contain all of the information that you should consider before making an
investment decision. You should read this entire prospectus carefully, including
the "Risk Factors" section and the financial statements, related notes and the
other more detailed information appearing elsewhere or incorporated by reference
in this prospectus. Unless otherwise indicated, "we", "us", "our" and similar
terms, as well as references to the "Company" and "Ramp", refer to Ramp
Corporation and its subsidiaries HealthRamp, LifeRamp and its newly acquired
division, Frontline, and not to the selling security holders. All industry
statistics incorporated by reference in this prospectus were obtained from data
prepared or provided by recognized industry sources.
Ramp Corporation
Ramp Corporation (formerly known as Medix Resources, Inc.), through its
wholly-owned HealthRamp subsidiary, provides Internet based communication, data
integration, and transaction processing designed to provide access to safer and
better healthcare. Ramp's products enable communication of high value-added
healthcare information among physician offices, hospitals, health management
organizations, and health insurance companies. In 2002, we organized a
wholly-owned subsidiary, PS Purchase Corp., in Delaware, and in 2003 changed its
name to HealthRamp, Inc. ("HealthRamp") to continue this healthcare technology
business. In 2003, we acquired the businesses and assets of Frontline Physicians
Exchange and Frontline Communications ("Frontline") used in or necessary for the
conduct of its 24-hour telephone answering and messaging services to physicians
and other medically-related businesses and virtual office services to
non-medical businesses and professionals, and the business and assets of
ePhysician, Inc., whose technology has been integrated with those of our
previously developed Cymedix suite of technologies, resulting in the
CarePoint(TM) Suite (the "CarePoint Suite") that we are currently marketing to
physicians and other healthcare professionals. In 2003 we also formed a
wholly-owned subsidiary, LifeRamp Family Financial, Inc. ("LifeRamp"), in Utah
that has not yet commenced business operations. LifeRamp's business purpose is
the making of non-recourse loans to terminally ill cancer patients secured by
their life insurance policies. In July 2004, we decided to indefinitely delay
the commencement of business operations of LifeRamp while we explore financing
and other possible alternatives. There can be no assurance that we will secure
financing on favorable terms necessary to fund LifeRamp's proposed business
model, that the necessary regulatory approvals will be obtained or that the
business, if commenced, will be cash flow positive or profitable.
We have limited revenues from current operations and are funding the
development and deployment of our products through the sales of our securities.
See "Risk Factors".
Because of our significant recurring losses, and the lack of certain
sources of capital to fund our operations, our independent accountants included
a "going concern" uncertainty in their audit reports on our audited financial
statements for the years ended December 31, 2003, 2002 and 2001. The "going
concern" uncertainty signifies that substantial doubt exists about our ability
to continue our business. For a complete description of risks regarding our
business and operations, we refer you to the section of this prospectus entitled
"Risk Factors".
Our principal executive office is located at 33 Maiden Lane, New York, New
York 10038, and our telephone number is (212) 440-1500.
The Offering
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Common stock offered by selling stockholders 110,741,046
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Use of Proceeds We will not receive any proceeds from the sale of
shares in this offering. We may receive up to
$14,500,000 upon exercise of the warrants.
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American Stock Exchange Symbol RCO
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RECENT DEVELOPMENTS
On May 27, 2004, we adopted a stockholder rights agreement that can be
triggered if any person or group acquires 20% or more of our common stock. On
June 1, 2004, we registered under Section 12(b) of the Securities Exchange Act
of 1934 the class of preferred share purchase rights issued under the
stockholder rights agreement.
On April 22, 2004, we entered into a letter of intent to acquire
substantially all of the electronic medical record software business operated by
Berdy Medical Systems, Inc. Such letter of intent is subject to the satisfaction
of customary closing conditions including the negotiation and execution of a
definitive purchase agreement, which has not and may not occur. No assurance can
be given that a definitive purchase agreement will be entered into on terms
satisfactory to us or that such transaction will be consummated.
On June 1, 2004, we entered into an employment agreement with Andrew
Brown, our Chairman of the Board, President and Chief Executive Officer. During
the employment period, which will end on June 30, 2006, Mr. Brown will be paid a
base salary at an annual rate of $240,000 per year; provided that, during the
six-month period ending November 30, 2004, Mr. Brown will be paid a base salary
at the rate of $120,000 per year and receive a retention bonus of three times
the amount of his reduction in pay payable in the form of shares of our common
stock, but only if he either remains employed as our Chief Executive Officer on
November 30, 2004, is terminated before that date without "cause" or resigns
before that date for "good reason". The employment agreement also provides for
the payment of performance-based bonuses tied to the growth of our gross
revenues, the grant of up to 6,000,000 options under our 2004 Plan, with an
exercise price of $0.18 per share, and the issuance to Mr. Brown of a warrant
whereby he will be entitled to purchase up to one-nineteenth of the outstanding
shares, at an exercise price to be determined. The employment agreement also
provides that in the event that Mr. Brown's employment is terminated for good
reason within six months or his employment is terminated within one year without
cause after any person or group acquires more than 25% of the combined voting
power of our then outstanding common stock, all of Mr. Brown's options will
become fully vested and immediately exercisable and Mr. Brown will be paid an
amount equal to twice his annual base salary and twice his bonus compensation
received during the twelve months immediately preceding the date of termination
of Mr. Brown's employment; provided that if the change in control resulted from
the sale of Ramp for less than $31 million, the payments to Mr. Brown will be in
amounts as described above in this paragraph as if the word "twice" had been
deleted.
In June 2004, we entered into amendments of our employment agreements with
Louis Hyman, our Chief Technology Officer, and Mitchell M. Cohen, our former
Chief Financial Officer, which provide that in the event that Mr. Hyman's or Mr.
Cohen's employment is terminated within one year without cause after any person
or group acquires more than 25% of the combined voting power of our then
outstanding common stock, all of their options will become fully vested and
immediately exercisable and each will be paid an amount equal to twice his
annual base salary and twice his bonus compensation received during the twelve
months immediately preceding the date of termination of his employment; provided
that if the change in control resulted from the sale of Ramp for less than $31
million, the payments to Mr. Hyman and/or Mr. Cohen will be in amounts as
described above in this paragraph as if the word "twice" had been deleted.
Effective on September 8, 2004, Mr. Cohen resigned his position as our Chief
Financial Officer and his employment agreement was terminated by us.
In June and September 2004, we implemented a reduction in work force and
salary reduction program, pursuant to which 73 employees were terminated and,
with respect to the June 2004 reduction in work force, some of the remaining
employees agreed to accept, during the six-month period ending November 30,
2004, in lieu of a portion of their base salaries, a retention
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bonus equal to an individually negotiated multiple of the amount of their
reduction in pay in the form of shares of our common stock, payable only if they
remained employed with us on November 30, 2004. The net realization of savings
and cash outflows resulting from the reduction in force and changes in
compensation is expected to be evident beginning in the third quarter of 2004.
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the following risk factors and other information in
this prospectus before investing in our common stock. The trading price of our
common stock could decline due to any of these risks, and you may lose all or
part of your investment.
We have incurred and reported significant recurring net losses which
endanger our viability as a going-concern and caused our accountants to issue a
"going concern" qualification in their annual audit report. We have reported net
losses applicable to our common stockholders of ($31,321,000), ($9,014,000) and
($10,636,000) for the years ended December 31, 2003, 2002, and 2001,
respectively, and ($15,955,000) for the six months ended June 30, 2004. At June
30, 2004, we had an accumulated deficit of ($87,482,000). These losses and
negative operating cash flows have caused our independent accountants to include
a "going concern" uncertainty in their reports in connection with their audits
of our financial statements for the years ended December 31, 2003, 2002 and
2001.
Our independent registered public accounting firm has advised our
management and our Audit Committee that there were material weaknesses in our
internal controls and procedures during fiscal year 2003, which management
believes have continued through the fiscal period ended June 30, 2004. Although
progress was made in both the first and second quarters, management believes
that if these material weaknesses are not corrected, a potential misapplication
of GAAP or potential accounting error in our consolidated financial statements
could occur. Enhancing our internal controls to correct the material weaknesses
has and will result in increased costs to us.
Based upon management's review of our internal controls and procedures,
our management, including our current Chief Executive Officer and former Chief
Financial Officer, has determined that we had inadequate controls and procedures
constituting material weaknesses as of December 31, 2003 which persisted during
the first and second quarters of fiscal year 2004. These inadequate controls and
procedures included:
o Inadequate accounting staffing and records to identify and record
all accounting entries.
o Lack of management review of our bank reconciliations, timely review
of expense reports, and timely review of agreements governing
complex financing transactions, employee and non-employee stock
based compensation arrangements and other transactions having
accounting ramifications.
o Failure to perform an adequate internal review of financial
information in periodic reports to ensure accuracy and completeness.
o Inadequate segregation of duties consistent with our internal
control objectives.
o Ineffective utilization of existing administrative personnel to
perform ministerial accounting functions, which would allow our
accounting department the opportunity to perform bookkeeping, record
keeping and other accounting functions effectively.
o Lack of management review of entries to the general ledger.
Our management has implemented and continues to implement potential
enhancements to our internal controls and procedures that it believes will
remedy the inadequacies in our internal controls and procedures.
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The following sets forth the steps we have taken through the fiscal period
ended June 30, 2004.
o In November, 2003, we hired a permanent Chief Financial Officer with
public company reporting experience.
o In December, 2003, we hired a staff accountant responsible for,
among other things, recording accounts payable. The individual
assists the Chief Financial Officer to identify, report and record
transactions in a timely manner and provides additional segregation
of duties consistent with our internal control objectives.
o Management reassigned certain tasks among the expanded accounting
department, as well as existing administrative personnel to perform
ministerial accounting functions, to improve and better accomplish
the bookkeeping, record keeping and other accounting functions.
o We commenced a search for a new position of Vice President of
Finance, which position was filled on August 2, 2004. The new Vice
President of Finance will be wholly dedicated to areas of internal
control, financial accounting and reporting.
o The review and sign off on all monthly bank reconciliations by the
Chief Financial Officer has been instituted.
o The review of all underlying agreements, contracts and financing
arrangements prior to their execution for accounting ramifications
has already been undertaken by the Chief Financial Officer to the
extent possible.
o We strengthened certain controls over cash disbursements including
adopting a policy that requires dual signatures of two senior
officers, at least one of whom is not involved in the transaction,
on disbursements in excess of $10,000.
o We implemented a policy requiring attendance by outside counsel at
all Board and Audit Committee meetings, including the timely
preparation of minutes of such meetings and reports to management to
discuss our implementation of any plans to address conditions
constituting the material weaknesses in its internal controls.
We have implemented and intend on implementing the following plans to
enhance our internal controls in the fiscal quarter ending September 30, 2004
and in subsequent fiscal quarters.
o As the new Vice President of Finance (hired on August 2, 2004)
transitions into his responsibilities and gains a full understanding
of our business, it is anticipated that this additional resource
will allow further redistribution of responsibilities among the
expanded accounting department and, more specifically, provide the
Chief Financial Officer with the necessary time to perform oversight
and supervisory functions in future periods. This includes timely
review of all underlying agreements, contracts and financing
arrangements, expense reports, entries to the general ledger and
periodic filings with the Securities and Exchange Commission.
o Our implementation of formal mechanized month end, quarter end and
year end closing and consolidation processes.
o In July 2004 we appointed two (2) additional independent directors
to serve on our Audit Committee.
o As a result of the resignation of our Chief Financial Officer on
September 8, 2004, the Company is currently conducting a search for
a suitable candidate to replace the former Chief Financial Officer.
While we believe that the remedial actions that have been or will be taken
will result in correcting the conditions constituting the material weaknesses in
our internal controls as soon as
6
practicable, the exact timing of when the conditions will be corrected is
dependent upon future events which may or may not occur. We are making every
effort to correct the conditions expediently and expect to correct the
conditions, thereby eliminating the material weaknesses no later than the fourth
quarter of fiscal year 2004. It is estimated that the cost to implement the
actions set forth above will be approximately $300,000 for our fiscal year ended
December 31, 2004 and approximately $200,000 for each fiscal year thereafter. In
addition, substantial additional costs may be necessary to implement the
provisions of Section 404 of the Sarbanes-Oxley Act of 2002 as relates to our
documentation and testing of the effectiveness of internal controls in 2005.
We rely on investments and financings to provide working capital which may
not be available to us in the future and may result in increased net losses and
accumulated deficit. While we believe that we can continue to sell our
securities to raise the cash needed to continue operating until cash flow from
operations can support our business, there can be no assurance that this will
occur. There can be no assurance that additional investments in our securities
or other debt or equity financings will be available to us on favorable terms,
or at all, to adequately support the development and deployment of our
technology. Moreover, failure to obtain such capital on a timely basis could
result in lost business opportunities. In addition, the terms of our debt or
equity financings have included, and in the future may include, contingent
anti-dilution provisions and the issuance of warrants, the accounting for which
have resulted, and for future financings may result, in significant non-cash
increases in our net losses and accumulated deficit.
The success of the development, distribution and deployment of our
technology is dependent to a significant degree on our key management and
technical personnel. We believe that our success will also depend upon our
ability to attract, motivate and retain highly skilled, managerial, sales and
marketing, and technical personnel, including software programmers and systems
architects skilled in the computer languages in which our technology operates.
Competition for such personnel in the software and information services
industries is intense. The loss of key personnel, or the inability to hire or
retain qualified personnel, could have a material adverse effect on our results
of operations, financial condition and/or business.
We expect to continue to experience losses until such time as our
technology can be successfully deployed and produce revenues and we may incur
charges relating to impairment of our tangible and intangible assets. The
continuing development, marketing and deployment of our technology will depend
upon our ability to obtain additional financing. Our technology has generated
limited recurring revenues to date. We are funding our operations now through
the sale of our securities. We are currently exploring the feasibility of using
LifeRamp to commence a new business, making non-recourse loans to terminally ill
cancer patients secured by their life insurance policies. There can be no
assurance that we will secure financing on favorable terms necessary to fund
that proposed business model, that the necessary regulatory approvals will be
obtained or that the business, if commenced, will be cash flow positive or
profitable. During 2003 and for the first six months of 2004, we invested
approximately $1.1 million and $0.9 million in LifeRamp, respectively. In July
2004, we decided to indefinitely delay the commencement of business operations
of LifeRamp while we explore financing and other possible alternatives. There
can be no assurance that we will secure financing on favorable terms necessary
to fund LifeRamp's proposed business model, that the necessary regulatory
approvals will be obtained or that the business, if commenced, will be cash flow
positive or profitable. Furthermore, under Statement of Financial Accounting
Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, the Company
reviews its goodwill for impairment at least annually, or more frequently
whenever events or changes in circumstances indicate that the carrying amount of
the asset may not be recovered. In addition, under Statement of Financial
Accounting Standards (SFAS) No. 144, long-lived assets are to be evaluated for
impairment when conditions or events are present which indicate that impairment
may have occurred. During the second quarter and into the third quarter of 2004,
there was a significant decrease in the
7
Company's market capitalization. Furthermore, the Company may take future
actions or enter into transactions that would impact the carrying value of its
tangible and intangible assets. In light of these developments, the Company is
presently re-evaluating the goodwill balances of each of its reporting units,
specifically Ramp and OnRamp, to determine whether any impairment charges are
required to be recorded under generally accepted accounting principles. Although
the market capitalization of the Company as a whole at September 30, 2004
exceeded the aggregate net worth of the Company, the analysis required under
generally accepted accounting principles is to be performed by reporting unit.
Therefore, the Company intends to hire an outside valuation firm to assist in
the analysis, and if it is determined that goodwill of one or both reporting
units is impaired, the Company will record an impairment charge upon such
determination.
We may not be able to retain our listing on the American Stock Exchange.
On September 13, 2004, we received a written notice (the "Notice") from the
American Stock Exchange (the "Amex") informing us, in relevant part, that we are
not in compliance with (i) Section 1003(a)(i) of the Amex rules as a result of
our stockholder's equity less than $2,000,000 and losses from continuing
operations and/or net losses in two out of three of its three most recent fiscal
years, (ii) Section 1003(a)(ii) of the Amex rules as a result of our
stockholder's equity of less than $4,000,000 and losses from continuing
operations and/or net losses in three out of its four most recent fiscal years,
(iii) Section 1003(a)(iv) of the Amex rules whereby, as a result of our
substantial sustained losses in relation to our overall operations or our
existing financial resources, or our impaired financial condition, it appears
questionable, in the opinion of Amex, as to whether we will be able to continue
operations and/or meet our obligations as they mature, and (iv) Section
1003(f)(v) of the Amex rules as a result of our common stock selling for a
substantial period at a low price per share. The Notice is not a notice of
delisting from the Amex or a notice by Amex to initiate delisting proceedings.
Specifically, the Notice provides that, in order to maintain the listing
of our common stock, we must submit a plan to the Amex by October 14, 2004,
advising Amex of the action we have taken, or the action we will take, to bring
us into compliance with the continued listing standards of the Amex within a
maximum of eighteen months from the date the Notice was received. Amex will
accept our plan if we provide a reasonable demonstration of an ability to regain
compliance with the continued listing standards within such eighteen month
period. If our plan is accepted, we will be able to maintain our listing on the
Amex during the plan period for up to eighteen months, subject to periodic
review by Amex to determine whether we are making progress in accordance with
our plan. Our management intends to timely provide Amex with our plan to achieve
compliance with all Amex listing criteria within such eighteen month period and
believes we will be able to maintain our Amex listing at all times during such
eighteen month period however, there can be no assurance that we will be able to
maintain our Amex listing throughout such eighteen month period.
Subject to our right of appeal of any Amex staff determination, Amex may
initiate delisting proceedings, as appropriate, if (i) we do not submit a plan,
(ii) our plan is not accepted, (iii) we do not make progress consistent with the
plan during the plan period, or (iv) we are not in compliance with the continued
listing standards at the conclusion of the plan period.
Trading in our common stock after a delisting, if any, would likely be
conducted in the over-the-counter markets in the so-called "pink sheets" or on
the National Association of Securities Dealers' Electronic Bulletin Board. As a
consequence of a delisting our shareholders would find it more difficult to
dispose of, or to obtain accurate quotations as to the market value of, our
common stock, and our common stock would become substantially less attractive as
collateral for margin and purpose loans, for investment by financial
institutions under their internal policies or state investment laws or as
consideration in future capital raising transactions.
8
Although we have had operations since 1988, because of our move away from
temporary healthcare staffing to provide healthcare connectivity solutions at
the point of care, we have a relatively short operating history in the
healthcare connectivity solutions business and limited financial data to
evaluate our business and prospects. In addition, our business model is likely
to continue to evolve as we attempt to develop our product offerings and enter
new markets. As a result, our potential for future profitability must be
considered in light of the risks, uncertainties, expenses and difficulties
frequently encountered by companies that are attempting to move into new markets
and continuing to innovate with new and unproven technologies. We are still in
the process of gaining experience in marketing physician connectivity products,
providing support services, evaluating demand for products, financing a
technology business and dealing with government regulation of health information
technology products. While we are putting together a team of experienced
executives, they have come from different backgrounds and may require some time
to develop an efficient operating structure and corporate culture for our
company. Furthermore, our executive management and Board of Directors have been
subject to change as executives have left or been terminated and others have
been hired to take their places and directors have left and others have been
elected or appointed to take their places. Such changes can cause disruption and
distraction.
Although we have focused our business on healthcare connectivity, we may
decide to explore new business models before our core business generates cash
flow, if at all. Until feasibility is proven for any such new business models,
such as those of our LifeRamp subsidiary described above, some of our scarce
resources may be allocated to endeavors which may never be commercialized.
The success of our products and services in generating revenue may be
subject to the quality and completeness of the data that is generated and stored
by the physician or other healthcare professionals and entered into our
interconnectivity systems, including the failure to input appropriate or
accurate information. Failure or unwillingness by the healthcare professional to
accommodate the required information may result in our not being paid for our
services.
As a developer of connectivity technology products, we will be required to
anticipate and adapt to evolving industry standards and regulations and new
technological developments. The market for our technology is characterized by
continued and rapid technological advances in both hardware and software
development, requiring ongoing expenditures for research and development, and
timely introduction of new products and enhancements to existing products. Our
future success, if any, will depend in part upon our ability to enhance existing
products, to respond effectively to technology changes and changes in applicable
regulations, and to introduce new products and technologies that are functional
and meet the evolving needs of our clients and users in the healthcare
information systems market.
We rely on a combination of internal development, strategic relationships,
licensing and acquisitions to develop our products and services. The cost of
developing new healthcare information services and technology solutions is
inherently difficult to estimate. Our development of proposed products and
services may take longer than originally expected, require more testing than
originally anticipated and require the acquisition of additional personnel and
other resources. In addition, there can be no assurance that the products or
services we develop or license will be able to compete with the alternatives
available to our customers.
New or newly integrated products and services will not become profitable
unless they achieve sufficient levels of market acceptance. There can be no
assurance that healthcare providers will accept from us new products and
services, or products and services that result from integrating existing and/or
acquired products and services, including the products and services we are
developing to integrate our services into the physician's office or other
medical facility, such as our handheld solution. In addition, there can be no
9
assurance that any pricing strategy that we implement for any such products and
services will be economically viable or acceptable to the target markets.
Failure to achieve broad penetration in target markets with respect to new or
newly integrated products and services could have a material adverse effect on
our business prospects. The market for our connectivity products and services in
the healthcare information systems may be slow to develop due to the large
number of practitioners who are resistant to change, as well as the financial
investment and workflow interruptions associated with change, particularly in a
period of rising pressure to reduce costs in the marketplace.
Achieving market acceptance of new or newly integrated products and
services is likely to require significant efforts and expenditures. Achieving
market acceptance for new or newly integrated products and services is likely to
require substantial marketing efforts and expenditure of significant funds to
create awareness and demand by participants in the healthcare industry. In
addition, deployment of new or newly integrated products and services may
require the use of additional resources for training our existing sales force
and customer service personnel and for hiring and training additional
salespersons and customer service personnel. There can be no assurance that the
revenue opportunities from new or newly integrated products and services will
justify amounts spent for their development, marketing and roll-out.
We could be subject to breach of warranty claims if our software products,
information technology systems or transmission systems contain errors,
experience failures or do not meet customer expectations. We could face breach
of warranty or other claims or additional development costs if the software and
systems we sell or license to customers or use to provide services contain
undetected errors, experience failures, do not perform in accordance with their
documentation, or do not meet the expectations that our customers have for them.
Undetected errors in the software and systems we provide or those we use to
provide services could cause serious problems for which our customers may seek
compensation from us. We attempt to limit, by contract, our liability for
damages arising from negligence, errors or mistakes. However, contractual
limitations on liability may not be enforceable in certain circumstances or may
otherwise not provide sufficient protection to us from liability for damages.
If our systems or the Internet experience security breaches or are
otherwise perceived to be insecure, our business could suffer. A security breach
could damage our reputation or result in liability. We retain and transmit
confidential information, including patient health information. Despite the
implementation of security measures, our infrastructure or other systems that we
interface with, including the Internet, may be vulnerable to physical break-ins,
hackers, improper employee or contractor access, computer viruses, programming
errors, attacks by third parties or similar disruptive problems. Any compromise
of our security, whether as a result of our own systems or systems that they
interface with, could reduce demand for our services.
Our products provide applications that relate to patient medication
histories and treatment plans. Any failure by our products to provide and
maintain accurate, secure and timely information could result in product
liability claims against us by our clients or their affiliates or patients. We
maintain insurance that we believe currently is adequate to protect against
claims associated with the use of our products, but there can be no assurance
that our insurance coverage would adequately cover any claim asserted against
us. A successful claim brought against us in excess of our insurance coverage
could have a material adverse effect on our results of operations, financial
condition and/or business. Even unsuccessful claims could result in the
expenditure of funds in litigation, as well as diversion of management time and
resources. Certain of our products are subject to compliance with HIPAA. Failure
to comply with HIPAA may have a material adverse effect on our business.
10
Government regulation of healthcare and healthcare information technology,
are in a period of ongoing change and uncertainty and creates risks and
challenges with respect to our compliance efforts and our business strategies.
The healthcare industry is highly regulated and is subject to changing
political, regulatory and other influences. Federal and state legislatures and
agencies periodically consider programs to reform or revise the United States
healthcare system. These programs may contain proposals to increase governmental
involvement in healthcare or otherwise change the environment in which
healthcare industry participants operate. Particularly, compliance with HIPAA
and related regulations are causing the healthcare industry to incur substantial
cost to change its procedures. Healthcare industry participants may respond by
reducing their investments or postponing investment decisions, including
investments in our products and services. Although we expect these regulations
to have the beneficial effect of spurring adoption of our software products, we
cannot predict with any certainty what impact, if any, these and future
healthcare reforms might have on our business. Existing laws and regulations
also could create liability, cause us to incur additional cost or restrict our
operations. The effect of HIPAA on our business is difficult to predict and
there can be no assurance that we will adequately address the business risks
created by the HIPAA. We may incur significant expenses relating to compliance
with HIPAA. Furthermore, we are unable to predict what changes to HIPAA, or the
regulations issued pursuant to HIPAA, might be made in the future or how those
changes could affect our business or the costs of compliance with HIPAA.
Government regulation of the Internet could adversely affect our business.
The Internet and its associated technologies are subject to government
regulation. Our failure to accurately anticipate the application of applicable
laws and regulations, or any other failure to comply, could create liability for
us, result in adverse publicity, or negatively affect our business. In addition,
new laws and regulations may be adopted with respect to the Internet or other
online services covering user privacy, patient confidentiality, consumer
protection and other services. We cannot predict whether these laws or
regulations will change or how such changes will affect our business. Government
regulation of the Internet could limit the effectiveness of the Internet for the
methods of healthcare e-commerce that we are providing or developing or even
prohibit the sale of particular products and services.
Our Internet-based services are dependent on the development and
maintenance of the Internet infrastructure and data storage facilities
maintained by third parties. Our ability to deliver our Internet-based products
and services is dependent on the development and maintenance of the
infrastructure of the Internet and the maintenance of data storage facilities by
third parties. This includes maintenance of a reliable network backbone and data
storage facilities with the necessary speed, data capacity and security, as well
as timely development of complementary products such as high-speed modems, for
providing reliable Internet access and services. If the Internet continues to
experience increased usage, the Internet infrastructure may be unable to support
the demands placed on it. In addition, the performance of the Internet may be
harmed by increased usage. The Internet has experienced a variety of outages and
other delays as a result of damages to portions of its infrastructure, and it
could face outages and delays in the future. These outages and delays could
reduce the level of Internet usage as well as the availability of the Internet
to us for delivery of our Internet-based products and services.
Some of our products and services will not be widely adopted until
broadband connectivity is more generally available. Some of our products and
services and planned services require a continuous broadband connection between
the physician's office or other healthcare provider facilities and the Internet.
The availability of broadband connectivity varies widely from location to
location and even within a single geographic area. The future availability of
broadband connections is unpredictable and is not within our control. While we
expect that many physician's offices and other healthcare provider facilities
will remain without ready access to broadband connectivity for some period of
time, we cannot predict how long that will be. Accordingly, the lack of these
broadband connections will continue to place limitations on the number of sites
that are able to utilize our Internet-based products and services and the
revenue we can expect to generate form those products and services.
11
Compliance with legal and regulatory requirements will be critical to
LifeRamp's operations, if any. If we, directly or indirectly through our
subsidiaries, erroneously disclose information that could be confidential and/or
protected health information, we could be subject to legal action by the
individuals involved, and could possibly be subject to criminal sanctions. In
addition, if LifeRamp is launched and fails to comply with applicable insurance
and consumer lending laws, states could bring actions to enforce statutory
requirements, which could limit its business practices in such states,
including, without limitation, limiting or eliminating its ability to charge or
collect interest on its loans or related fees, or limit or eliminate its ability
to secure its loans with its borrowers' life insurance policies. Any such
actions if commenced, would have a material and adverse impact on LifeRamp's
business, operations and financial condition.
We have been granted certain patent rights, trademarks and copyrights
relating to our software. However, patent and intellectual property legal issues
for software programs, such as the our products, are complex and currently
evolving. Since patent applications are secret until patents are issued in the
United States, or published in other countries, we cannot be sure that we are
first to file any patent application. In addition, there can be no assurance
that competitors, many of which have far greater resources than we do, will not
apply for and obtain patents that will interfere with our ability to develop or
market product ideas that we have originated. Furthermore, the laws of certain
foreign countries do not provide the protection to intellectual property that is
provided in the United States, and may limit our ability to market our products
overseas. We cannot give any assurance that the scope of the rights we have are
broad enough to fully protect our technology from infringement.
Litigation or regulatory proceedings may be necessary to protect our
intellectual property rights, such as the scope of our patent. Such litigation
and regulatory proceedings are very expensive and could be a significant drain
on our resources and divert resources from product development. There is no
assurance that we will have the financial resources to defend our patent rights
or other intellectual property from infringement or claims of invalidity. We
have been notified by a party that it believes our pharmacy product may infringe
on patents that it holds. We have retained patent counsel who has made a
preliminary investigation and determined that our product does not infringe on
the identified patents. At this time no legal action has been instituted. We
also rely upon unpatented proprietary technology and no assurance can be given
that others will not independently develop substantially equivalent proprietary
information and techniques or otherwise gain access to or disclose our
proprietary technology or that we can meaningfully protect our rights in such
unpatented proprietary technology. No assurance can be given that efforts to
protect such information and techniques will be successful. The failure to
protect our intellectual property could have a material adverse effect on our
operating results, financial position and business.
As of September 16, 2004, we had 238,354,869 outstanding shares of common
stock and 126,139,823 shares of common stock reserved for issuance upon the
exercise of options, warrants, and shares of our convertible preferred stock and
convertible debentures and notes outstanding on such date. Most of these shares
will be immediately saleable upon exercise or conversion under registration
statements we have filed with the SEC. The exercise prices of options, warrants
or other rights to acquire common stock presently outstanding range from $0.01
per share to $4.97 per share. During the respective terms of the outstanding
options, warrants, preferred stock and other outstanding derivative securities,
the holders are given the opportunity to profit from a rise in the market price
of our common stock, and the exercise of any options, warrants or other rights
may dilute the book value per share of our common stock and put downward
12
pressure on the price of our common stock. The existence of the options,
conversion rights, or any outstanding warrants may adversely affect the terms on
which we may obtain additional equity financing. Moreover, the holders of such
securities are likely to exercise their rights to acquire common stock at a time
when we would otherwise be able to obtain capital on terms more favorable than
could be obtained through the exercise or conversion of such securities.
We have raised substantial amounts of capital in private placements from
time to time. The securities offered in such private placements were not
registered with the SEC or any state agency in reliance upon exemptions from
such registration requirements. Such exemptions are highly technical in nature
and if we inadvertently failed to comply with the requirements of any of such
exemptive provisions, investors would have the right to rescind their purchase
of our securities or sue for damages. If one or more investors were to
successfully seek such rescission or prevail in any such suit, we could face
severe financial demands that could materially and adversely affect our
financial position. Financings that may be available to us under current market
conditions frequently involve sales at prices below the prices at which our
common stock currently trades on the American Stock Exchange, as well as the
issuance of warrants or convertible securities at a discount to market price.
Investors in our securities may suffer dilution. The issuance of shares of
common stock, or shares of common stock underlying warrants, options or
preferred stock or convertible notes will dilute the equity interest of existing
stockholders and could have a significant adverse effect on the market price of
our common stock. The sale of common stock acquired at a discount could have a
negative impact on the market price of our common stock and could increase the
volatility in the market price of our common stock. In addition, we may seek
additional financing which may result in the issuance of additional shares of
our common stock and/or rights to acquire additional shares of our common stock.
The issuance of our common stock in connection with such financing may result in
substantial dilution to the existing holders of our common stock. Those
additional issuances of common stock would result in a reduction of your
percentage interest in our company.
Historically, our common stock has experienced significant price
fluctuations. One or more of the following factors influence these fluctuations:
o unfavorable announcements or press releases relating to the
technology sector;
o regulatory, legislative or other developments affecting us
or the healthcare industry generally;
o conversion of our preferred stock and convertible debt into
common stock at conversion rates based on then current market
prices or discounts to market prices of our common stock and
exercise of options and warrants at below current market
prices;
o sales by those financing our company through convertible
securities the underlying common stock of which have been
registered with the SEC and may be sold into the public market
immediately upon conversion; and
o market conditions specific to technology and internet
companies, the healthcare industry and general market
conditions.
13
In addition, in recent years the stock market has experienced significant
price and volume fluctuations. These fluctuations, which are often unrelated to
the operating performance of specific companies, have had a substantial effect
on the market price for many healthcare related technology companies. Factors
such as those cited above, as well as other factors that may be unrelated to our
operating performance, may adversely affect the price of our common stock.
We have not had earnings, but if earnings were available, it is our
general policy to retain any earnings for use in our operations. Therefore, we
do not anticipate paying any cash dividends on our common stock in the
foreseeable future despite the recent reduction of the federal income tax rate
on dividends. Any payment of cash dividends on our common stock in the future
will be dependent upon our financial condition, results of operations, current
and anticipated cash requirements, preferred rights of holders of preferred
stock, plans for expansion, as well as other factors that our Board of Directors
deems relevant. We anticipate that our future financing agreements may prohibit
the payment of common stock dividends without the prior written consent of those
investors.
We may have to lower prices or spend more money to compete effectively
against companies with greater resources than us, which could result in lower
revenues. The eventual success of our products in the marketplace will depend on
many factors, including product performance, price, ease of use, support of
industry standards, competing technologies and customer support and service.
Given these factors we cannot assure you that we will be able to compete
successfully. For example, if our competitors offer lower prices, we could be
forced to lower prices which could result in reduced or negative margins and a
decrease in revenues. If we do not lower prices we could lose sales and market
share. In either case, if we are unable to compete against our main competitors,
which include established companies with significant financial resources, we
would not be able to generate sufficient revenues to grow our company or reverse
our history of operating losses. In addition, we may have to increase expenses
to effectively compete for market share, including funds to expand our
infrastructure, which is a capital and time intensive process. Further, if other
companies choose to aggressively compete against us, we may have to increase
expenses on advertising, promotion, trade shows, product development, marketing
and overhead expenses, hiring and retaining personnel, and developing new
technologies. These lower prices and higher expenses would adversely affect our
operations and cash flows.
As with any business, growth in absolute amounts of selling, general and
administrative expenses or the occurrence of extraordinary events could cause
actual results to vary materially and adversely from the results contemplated by
the forward-looking statements. Budgeting and other management decisions are
subjective in many respects and thus susceptible to incorrect decisions and
periodic revisions based on actual experience and business developments, the
impact of which may cause us to alter our marketing, capital expenditures or
other budgets, which may, in turn, affect our results of operations. Assumptions
relating to the foregoing involve judgments with respect to, among other things,
future economic, competitive and market conditions, and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond our control. Although we believe the assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could prove inaccurate, and therefore, there can be no assurance that the
results contemplated in the forward-looking statements will be realized.
In light of the significant uncertainties inherent in the forward-looking
information included herein, the inclusion of such information should not be
regarded as a representation by us or any other person that our objectives or
plans for the Company will be achieved.
14
FORWARD-LOOKING STATEMENTS
Certain information contained in this prospectus and the documents
incorporated by reference into this prospectus include forward-looking
statements (as defined in Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act), which mean that they relate to events or
transactions that have not yet occurred, our expectations or estimates for our
future operations, our growth strategies or business plans or other facts that
have not yet occurred. Such statements can be identified by the use of
forward-looking terminology such as "might," "may," "will," "could," "expect,"
"anticipate," "estimate," "likely," "believe," or "continue" or the negative
thereof or other variations thereon or comparable terminology. The above risk
factors contain discussions of important factors that should be considered by
prospective investors for their potential impact on forward-looking statements
included in this prospectus and in the documents incorporated by reference into
this prospectus. These important factors, among others, may cause actual results
to differ materially and adversely from the results expressed or implied by the
forward-looking statements.
USE OF PROCEEDS
The selling security holders will receive the net proceeds from the sale
of shares. We will not receive any of the proceeds from any sale of the shares
by the selling security holders. However, we will receive the proceeds from the
cash exercise of warrants to purchase certain of the shares offered hereunder.
If all warrants covered hereby are exercised for cash in accordance with their
terms, we would receive gross proceeds of $14,500,000. Any such gross proceeds
will be used for working capital purposes.
DESCRIPTION OF THE TRANSACTIONS
On July 14, 2004, we entered into a Note and Warrant Purchase Agreement
(the "Note Purchase Agreement") with Cottonwood Ltd. and Willow Bend Management
Ltd., each an accredited investor. Under the terms of the Note Purchase
Agreement, we issued a convertible promissory note in the aggregate principal
amount of $2,100,000 to each of Cottonwood Ltd. and Willow Bend Management Ltd.
Each promissory note is convertible into shares of our common stock at an
initial conversion price of $0.30 cents per share, or 7,000,000 shares of common
stock. In addition, we issued to each of Cottonwood Ltd. and Willow Bend
Management Ltd. warrants exercisable into 4,683,823 shares of common stock at an
exercise price of $0.11 cents per share, warrants exercisable into 4,683,823
shares of common stock at an exercise price of $0.15 cents per share, warrants
exercisable into 4,683,823 shares of common stock at an exercise price of $0.35
cents per share and warrants exercisable into 4,683,823 shares of common stock
at an exercise price of $0.40 cents per share. The warrants have a term of one
year. The issuance of the warrants together with the convertible notes will
create a beneficial conversion discount which shall be amortized to interest
expense in future periods.
Pursuant to the Registration Rights Agreement, dated concurrently with the
Note Purchase Agreement (the "Registration Rights Agreement"), we have agreed to
register the shares of common stock underlying the convertible promissory notes
and warrants with the SEC on a registration statement (of which this prospectus
forms a part) and to pay to Cottonwood Ltd. and Willow Bend Management Ltd.
liquidated damages if the Registration Statement is not filed on or before
August 13, 2004 and/or is not declared effective within 90 days following the
date the Registration Statement (of which this prospectus forms a part) is filed
with the SEC, an amount, at the option of the Company, in cash or shares of
common stock registered with the SEC equal to: (i) one percent (1.0%) of the
initial investment amount for each calendar month or portion thereof of delayed
effectiveness, up to two calendar months, and (ii) two percent (2.0%) of the
initial investment amount for each calendar month or portion thereof thereafter
until effectiveness, less any amount of convertible promissory note that has
been converted or redeemed.
15
Redwood Capital Partners, Inc. agreed to perform financial advisory
services for us. In connection with such services, as a portion of compensation
owed to Redwood and in addition to payment in cash of $320,000 from us to
Redwood, we agreed to issue to Redwood warrants exercisable into 350,000 shares
of our common stock exercisable at $0.11 cents per share, warrants exercisable
into 350,000 shares of our common stock exercisable at $0.15 cents per share,
warrants exercisable into 350,000 shares of our common stock exercisable at
$0.35 cents per share and warrants exercisable into 350,000 shares of our common
stock exercisable at $0.40 cents per share. The warrants have a term of one
year. In connection with the issuance of warrants, we agreed to register the
shares underlying the warrants with the SEC on a registration statement (of
which this prospectus forms a part).
On July 14, 2004 we entered into a Letter Agreement (the "Letter
Agreement") with Hilltop Services, Ltd. in connection with the anti-dilution
provisions contained in that certain Common Stock and Warrant Purchase
Agreement, dated March 4, 2004, between Hilltop Services, Ltd. and the Company.
Under the terms of the Letter Agreement and in consideration for the waiver by
Hilltop of its anti-dilution rights, we issued to Hilltop Services, Ltd. an
additional 24,130,435 shares of our common stock (of which an aggregate of
13,260,870 are being registered on a registration statement of which this
prospectus forms a part), a convertible promissory note in the aggregate
principal amount of $1,920,000 convertible into shares of our common stock at a
conversion price of $0.30 cents per share, or 6,400,000 shares of common stock,
and warrants exercisable into 4,282,354 shares of common stock at an exercise
price of $0.11 cents per share, warrants exercisable into 4,282,354 shares of
common stock at an exercise price of $0.15 cents per share, warrants exercisable
into 4,282,354 shares of common stock at an exercise price of $0.35 cents per
share and warrants exercisable into 4,282,354 shares of common stock at an
exercise price of $0.40 cents per share. The warrants have a term of one year.
Pursuant to the Registration Rights Agreement we agreed to register the shares
of common stock as well as the shares of common stock underlying the convertible
promissory note and warrants on a registration statement (of which this
prospectus is a part). The issuance of these securities is expected to result in
significant financing and deemed dividend costs which shall be recorded in the
third quarter of 2004.
In connection with the anti-dilution provisions contained in the
agreements applicable to each person, Messrs. Richard Rosenblum and David
Stefansky each received 860,158 shares of our common stock (of which an
aggregate of 656,680 are being registered on a registration statement of which
this prospectus forms a part). We agreed to register the shares of common stock
on a registration statement (of which this prospectus is a part).
Messrs. Rosenblum and Stefansky each received 500,000 shares of our common
stock and warrants exercisable into 1,000,000 shares of common stock at an
exercise price of $0.18 cents per share as compensation for financial advisory
services performed for us. The warrants have a term of five years. We agreed to
register the shares of common stock as well as the shares of common stock
underlying the warrants on a registration statement (of which this prospectus is
a part).
Pursuant to that certain Fee Payment Agreement, dated August 20, 2004 (the
"Fee Payment Agreement"), Martin Eric Weisberg, Esq., an accredited investor and
a partner at the law firm of Jenkens & Gilchrist Parker Chapin LLP, was issued
4,000,000 shares of our common stock for the benefit of Jenkens & Gilchrist
Parker Chapin LIP as payment for legal services previously rendered and to be
rendered to us by Jenkens & Gilchrist Parker Chapin LLP in connection with
representation on our general corporate and securities matters, including the
sale of the notes and warrants pursuant to the Note Purchase Agreement. We
agreed to register the shares of common stock on a registration statement (of
which this prospectus is a part).
16
Each of Advantage Technologies, Inc., Conceptual Litho Reproductions,
Ellis Advertising, Mathe, Inc., Soffront Software Inc., Something Digital.Com
L.L.C., PowerTest, Inc. and Kate McGowan Consulting are accredited investors and
vendors that provide products or services to us in connection with vendor
agreements between each vendor and us. Under the terms of an agreement for
payment of account (the "Payment of Account Agreement") between each vendor and
us, in lieu of cash compensation we agreed to issue an aggregate of 8,763,117
shares of our common stock to such vendors as compensation for delivery of
certain products or services to us. The shares of common stock were issued at
approximately $0.10 cents per share based upon the average of the closing bid
price of our common stock for the week prior to the date of such agreement. We
agreed to register the shares of common stock on a registration statement (of
which this prospectus is a part).
Each of Stride & Associates, Mr. Colin Parlett and Lagniappe Resources,
Inc. is a vendor that provides products or services to us in connection with
vendor agreements between each vendor and us. Under the terms of a settlement
agreement (the "Settlement Agreement") between each vendor and us, in lieu of
cash compensation we agreed to issue an aggregate of 1,225,000 shares of our
common stock to such vendors as compensation for delivery of certain products or
services to us. The shares of common stock were issued at approximately $0.10
cents per share, representing an approximate 10% discount to the closing market
price of our common stock on the date of such agreement. We agreed to register
the shares of common stock on a registration statement (of which this prospectus
is a part).
Each of Phoenix PMT LLC, Search Net Corporation, Mr. Ron Munkittrick, Mr.
Xavier Hansen and Mr. Gennady Shpits provides consulting services to us in
connection with consulting arrangements between each consultant and us. Under
the terms of a retention bonus program (the "Retention Bonus Program") between
each consultant and us, in lieu of cash compensation we agreed to issue an
aggregate of 344,395 shares of our common stock to such consultants as
compensation for performance of certain consulting services to us. The shares of
common stock were issued at approximately $0.10 cents per share, representing an
approximate 10% discount to the lesser of: (i) the closing market price of our
common stock on the due date of such payment and (ii) the average closing price
of the common stock for the five days preceding such payment date. We agreed to
register the shares of common stock on a registration statement (of which this
prospectus is a part).
Pursuant to that certain Settlement Agreement and Mutual Release, dated
August 19, 2004 (the "Locke Lidell Agreement"), the law firm of Locke Liddell &
Sapp LLP, was issued 755,045 shares of our common stock as payment for
$77,467.63 owed for legal services previously rendered to us in connection with
representation of LifeRamp on our general corporate matters. We agreed to
register the shares of common stock on a registration statement (of which this
prospectus is a part).
On or about July 16, 2004, Clinton Group, Inc., as plaintiff and sub
sub-landlord, filed a summons and complaint against us, as defendant, with the
Supreme Court of the State of New York, County of New York (Index No. 110371)
alleging, among other things, breach of an alleged sublease agreement by us for
non-payment of the security deposit and one month's rent for the premises
located at 55 Water Street, New York, New York. In the summons and complaint,
Clinton sought repossession of the premises, damages for non-payment of rent in
the sum of $128,629.16, additional damages under the sublease through the date
of trial for the remainder of the term of the Sublease, plus interest and
attorneys fees. On August 20, 2004, we entered into a Settlement Agreement and
Release with Clinton (the "Clinton Settlement Agreement") pursuant to which, in
full settlement of, and release from, any and all claims against us by Clinton
17
relating to the alleged sublease, we agreed to pay to Clinton, an accredited
investor, (i) the amount of $75,000 in cash, (ii) the amount of $150,000 due
upon the earlier of the one year anniversary of our agreement or upon our
raising an aggregate of $5,000,000 in gross proceeds from third party investors,
and (iii) issue to Clinton 1,150,000 shares of our common stock. We agreed to
register the shares of common stock on a registration statement (of which this
prospectus is a part).
Pursuant to that certain Settlement Agreement and Mutual Release, dated
August 19, 2004 (the "Buckley Kolar Settlement Agreement"), the law firm of
Buckley Kolar LLP, was issued 529,259 shares of our common stock as payment for
$54,302.01 owed for legal services previously rendered to us in connection with
representation of LifeRamp on our general corporate matters. We agreed to
register the shares of common stock on a registration statement (of which this
prospectus is a part).
Reference is made to the Note Purchase Agreement, the Registration Rights
Agreement, the Letter Agreement, the Fee Payment Agreement, the Payment of
Account Agreement, the Settlement Agreement, the Retention Bonus Program, the
Locke Lidell Agreement, the Clinton Settlement Agreement and the Buckley Kolar
Settlement Agreement that are filed as exhibits to the Registration Statement
(of which this prospectus forms a part) for more complete descriptions of the
provisions that are summarized under this caption.
SELLING STOCKHOLDERS
The following table sets forth the shares beneficially owned, as of
September 20, 2004, by the selling stockholders prior to the offering
contemplated by this prospectus, the number of shares each selling stockholder
is offering by this prospectus and the number of shares which each would own
beneficially if all such offered shares are sold. The selling stockholders
acquired their beneficial interests in the shares being offered hereby in
transactions described under the heading "Description of the Transactions."
Except as expressly set forth below, none of the selling stockholders is a
registered broker-dealer or an affiliate of a registered broker-dealer. Each of
the selling stockholders has acquired his, her or its shares solely for
investment and not with a view to or for resale or distribution of such
securities.
Beneficial ownership is determined in accordance with SEC rules and
includes voting or investment power with respect to the securities. However,
each of the selling stockholders is subject to certain limitations on the
exercise of their warrants or conversion of their promissory notes, if any. The
most significant of these limitations is that such selling stockholder may not
exercise its warrants or convert its promissory notes, if such exercise or
conversion would cause such holder's beneficial ownership of our common stock
(excluding shares underlying any of their unexercised warrants or unconverted
promissory notes) to exceed 4.99% of the outstanding shares of common stock.
18
Number of
Shares of Percentage of
Shares of Common Common Stock Common Stock
Stock Owned Prior Shares of Common Owned After Owned After
Names and Addresses to Offering Stock to be Sold the Offering the Offering
-------------------------- ----------------- ----------------- ------------ -------------
Hilltop Services, Ltd. (1) 36,790,286 36,790,286 (2) 0 0
Cottonwood Ltd. (3) 25,735,292 25,735,292 (4) 0 0
Willow Bend Management Ltd. (5) 25,735,292 25,735,292 (6) 0 0
Martin Eric Weisberg, Esq. (7) 4,000,000 4,000,000 0 0
Redwood Capital Partners, Inc. (8) 1,400,000 1,400,000 (9) 0 0
Richard Rosenblum (10) 2,156,680 2,156,680 (11) 0 0
David Stefansky (12) 2,156,680 2,156,680 (13) 0 0
Advantage Technologies, Inc. (14) 101,890 101,890 0 0
Conceptual Litho Reproductions (15) 959,846 959,846 0 0
Ellis Advertising (16) 2,300,000 2,300,000 0 0
Mathe, Inc. (17) 3,000,000 3,000,000 0 0
Soffront Software Inc. (18) 954,000 954,000 0 0
Something Digital.Com L.L.C. (19) 750,000 750,000 0 0
Stride & Associates (20) 840,000 840,000 0 0
PowerTest, Inc. (21) 576,608 576,608 0 0
Kate McGowan Consulting (22) 120,773 120,773 0 0
Buckley Kolar LLP (23) 529,259 529,259 0 0
Locke Liddell & Sapp LLP (24) 755,045 755,045 0 0
Colin Parlett (25) 320,000 320,000 0 0
Lagniappe Resources, Inc. (26) 65,000 65,000 0 0
Phoenix PMT LLC (27) 53,082 53,082 0 0
Search Net Corporation (28) 85,283 85,283 0 0
19
Ron Munkittrick (29) 150,260 150,260 0 0
Xavier Hansen (30) 29,291 29,291 0 0
Gennady Shpits (31) 26,479 26,479 0 0
Clinton Group, Inc. (32) 1,150,000 1,150,000 0 0
----------
* Less than 1%
(1) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Ms.
Mary Lowenthal. The address of the selling stockholder is Mevot David
8, Ramat Gan, Israel.
(2) Includes 17,129,416 shares issuable upon exercise of warrants to
purchase shares of common stock and 6,400,000 shares of our common
stock issuable upon conversion of promissory notes.
(3) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
Neil Smollett. The address of the selling stockholder is Moshav
Bitzaron, Israel.
(4) Includes 18,735,292 shares issuable upon exercise of warrants to
purchase shares of common stock and 7,000,000 shares of our common
stock issuable upon conversion of promissory notes.
(5) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
Michael Raviv. The address of the selling stockholder is 2 Nevim
Street, Ramat Hasharon, Israel.
(6) Includes 18,735,292 shares issuable upon exercise of warrants to
purchase shares of common stock and 7,000,000 shares of our common
stock issuable upon conversion of promissory notes.
(7) The selling stockholder is a partner at the law firm of Jenkens &
Gilchrist Parker Chapin LLP and the shares of common stock are being
issued to the selling stockholder for the benefit of Jenkens &
Gilchrist Parker Chapin LLP. The address of the selling stockholder is
c/o Jenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405
Lexington Avenue, New York, New York 10174.
(8) The selling stockholder advised us that the natural persons having
voting or dispositive power over such shares of common stock are
Messrs. Richard Rosenblum and David Stefansky. The address of the
selling stockholder is 19 Horizon Drive, Wayne, New Jersey 07470.
(9) Represents shares issuable upon exercise of warrants to purchase share
of common stock.
(10) The address of the selling stockholder is 19 Horizon Drive, Wayne, New
Jersey 07470.
(11) Includes 1,000,000 shares issuable upon exercise of warrants to
purchase share of common stock.
(12) The address of the selling stockholder is 2317 Avenue K, Brooklyn, New
York 11210.
(13) Includes 1,000,000 shares issuable upon exercise of warrants to
purchase share of common stock.
(14) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
Barry Malter. The address of the selling stockholder is 30 Miller
Circle, Armonk, New York 10504.
(15) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
Eric Bernstein. The address of the selling stockholder is 420 West 25th
Street, New York, New York 10001.
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(16) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr. Ron
Ellis. The address of the selling stockholder is 6100 Wilshire
Boulevard, Suite 310, Los Angeles, California 90048.
(17) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
Mark Hicks. The address of the selling stockholder is 1259 Route 46,
Bldg. 1, Parsippany, New Jersey 07054.
(18) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
James Boger. The address of the selling stockholder is 45437 Warm
Spring Blvd., Freemont, Illinois 94539.
(19) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
Jonathan P. Klonsky. The address of the selling stockholder is 60 East
42nd Street, Suite 1630, New York, New York 10165.
(20) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Ms.
Jane Woodworth, as attorney for Stride & Associates. The address of the
selling stockholder is 76 Fiske Hill Road, Sturbridge, Massachusetts
01566.
(21) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
Thomas R. Lynch. The address of the selling stockholder is 145 Natoma
Street, 3rd Floor, San Francisco, California 94105.
(22) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Ms.
Catherine McGowan. The address of the selling stockholder is 70
Chestnut Avenue, Clarendon Hills, Illinois 60514.
(23) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
Jeremiah Buckley. The address of the selling stockholder is Buckley
Kolar LLP, 1250 24th Street, N.W., Suite 700, Washington, D.C. 20037.
(24) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
David Taylor. The address of the selling stockholder is Locke Liddell &
Sapp LLP, 3400 JP Morgan Chase Tower, 600 Travis, Houston, Texas 77002.
(25) The address of the selling stockholder is 406 Feather Rock Drive,
Rockville, Maryland 20850.
(26) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Ms.
Geri Hand. The address of the selling stockholder is 1640 Mount
McKinley Drive, Grayson, Georgia 30017-2980.
(27) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
John Tsemberides. The address of the selling stockholder is 25-40 Shore
Boulevard, #7A, Astoria, New York 11102.
(28) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
Marco Trezza. The address of the selling stockholder is 106 West 80th
Street, 1R, New York, New York 10024-6333.
(29) The address of the selling stockholder is 760 Warren Street, Westfield,
New Jersey 07090.
(30) The address of the selling stockholder is 873 Davidson Road,
Piscataway, New Jersey 08854.
(31) The address of the selling stockholder is 40 Donna Court, #11, Staten
Island, New York 10314.
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(32) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Mr.
John Hall. The address of the selling stockholder is 9 West 57th
Street, New York, New York 10019.
Relationship Between Ramp and the Selling Stockholders
Except as disclosed in this prospectus, none of the selling stockholders
are affiliates or controlled by our affiliates. Except as disclosed in this
prospectus, none of the selling stockholders are now or were at any time in the
past an officer or director of ours or of any of our predecessors or affiliates.
We have separate contractual obligations to file this registration statement (of
which this prospectus forms a part) with each of the selling stockholders.
DESCRIPTION OF SECURITIES
Our authorized capital consists of 400,000,000 shares of common stock, par
value $.001 per share, and 2,500,000 shares of preferred stock, par value $1.00
per share. As of September 16, 2004, we had outstanding 238,354,869 shares of
common stock and 1 share of 1996 Preferred Stock. As of such date, our common
stock was held of record by approximately 460 persons and beneficially owned by
approximately 10,000 persons.
Common Stock
Each share of common stock is entitled to one vote at all meetings of
stockholders. Stockholders are not permitted to accumulate votes in the election
of directors. Currently, the Board of Directors consists of five directors, who
serve for staggered terms of three years, with at least two directors elected at
every annual meeting. All shares of common stock are equal to each other with
respect to liquidation rights and dividend rights. There are no preemptive
rights to purchase any additional shares of common stock. In the event of our
liquidation, dissolution or winding up, holders of the common stock will be
entitled to receive on a pro rata basis all of our assets remaining after
satisfaction of all liabilities and preferences of the outstanding preferred
stock.
Preferred Stock
We are authorized to issue up to 2,500,000 shares of preferred stock. Our
preferred stock may be issued in one or more series, the terms of which may be
determined at the time of issuance by our Board of Directors, without further
action by stockholders and may include voting rights (including the right to
vote as a series on particular matters), preferences as to dividends and
liquidation, conversion, redemption rights and sinking fund provisions. The
issuance of preferred stock could reduce the rights, including voting rights, of
the holders of common stock, and, therefore, reduce the value of our common
stock. In particular, specific rights granted to future holders of preferred
stock could be used to restrict our ability to merge with or sell our assets to
a third party, thereby preserving control of Ramp Corporation by existing
management.
Convertible Promissory Notes
On July 14, 2004, we issued promissory notes to each of Cottonwood Ltd.,
Willow Bend Management Ltd. and Hilltop Services, Ltd. in the aggregate
principal amount of $6,120,000. The Cottonwood and Willow Bend promissory notes
were issued in connection with the Note Purchase Agreement. The Hilltop
promissory note was issued in connection with the Letter Agreement. The
promissory notes mature on the earliest of January 14, 2005 or the acceleration
of the obligations as contemplated by the promissory notes (the "Maturity
Date"). The promissory notes bear interest at the rate of six percent (6.0%) per
annum. Interest is payable on the Maturity Date in cash or shares of our common
stocks in accordance with the terms of the promissory notes.
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The promissory notes are convertible, at the option of the holder and us,
into shares of our common stock at a fixed conversion price of $0.30 per share,
on the terms and conditions and subject to adjustment as provided in the notes.
If, on any day following the forty-five day anniversary of July 14, 2004,
the average closing sale price of our common stock for the ten trading days
immediately prior to such date is less than $0.15 cents per share, then the
indebtedness represented by each promissory note shall be automatically, and
without further action by the holder or us, secured by a first priority lien
against all of our assets and property, including any and all of our
intellectual property, software code, trademarks and trade names.
The terms of the promissory notes prohibit conversion of the notes to the
extent that conversion of the notes would result in any holder beneficially
owning in excess of 4.99% of our outstanding shares of common stock. A holder
may waive the 4.99% limitation upon 65 days prior written notice to us.
Reference is made to the promissory notes and the Note Purchase Agreement
that are filed as exhibits to the Registration Statement (of which this
prospectus forms a part) for a more complete description of the terms and
conditions of the agreements with the holders of our promissory notes including
restrictive covenants relating to the incurrence of liens or encumbrances on
assets, cash expenditures, a board designee, and consent to subsequent
financings.
Transfer Agent and Registrar
We have retained Computershare Trust Company, Inc., 350 Indiana Street,
Suite 800, Golden, Colorado 80401, as Transfer Agent and Registrar, for our
common stock. Computershare Trust Company's telephone number is (303) 262-0600.
PLAN OF DISTRIBUTION
The selling security holders and any of their pledgees, donees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded. These sales may be at fixed or negotiated prices.
The selling security holders may use any one or more of the following methods
when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales, but, if at all, only after the effectiveness of the
Registration Statement and the approval for listing by the American
Stock Exchange of the shares of common stock offered hereby;
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o broker-dealers may agree with the selling security holders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling security holders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available, rather
than under this prospectus.
The selling security holders may also engage in short sales against the
box, puts and calls and other transactions in our securities or derivatives of
our securities and may sell or deliver shares in connection with these trades.
The selling security holders may pledge their shares to their brokers under the
margin provisions of customer agreements. If a selling stockholder defaults on a
margin loan, the broker may, from time to time, offer and sell the pledged
shares. We believe that the selling security holders have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares other than ordinary course
brokerage arrangements, nor is there an underwriter or coordinating broker
acting in connection with the proposed sale of shares by the selling security
holders.
Broker-dealers engaged by the selling security holders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling security holders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated. The selling security holders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved.
Selling security holders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. If the selling security
holders are deemed to be underwriters, the selling security holders may be
subject to certain statutory and regulatory liabilities, including liabilities
imposed pursuant to Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.
We are required to pay all fees and expenses incident to the registration
of the shares. Otherwise, all discounts, commissions or fees incurred in
connection with the sale of the common stock offered hereby will be paid by the
selling security holders.
Upon our being notified by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such selling stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such shares were sold, (iv) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus, and (vi) other facts
material to the transaction.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions, if required, only
through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be sold unless the shares have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and complied with.
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We advised the selling security holders that the anti-manipulative
provisions of Regulation M promulgated under the Exchange Act may apply to their
sales of the shares offered hereby.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides, in general, that a corporation incorporated under the laws of
the State of Delaware, such as the registrant, may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than a derivative action by or in
the right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. In the case of a derivative action, a Delaware corporation
may indemnify any such person against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification will be made in
respect of any claim, issue or matter as to which such person will have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or any other court in which such
action was brought determines such person is fairly and reasonably entitled to
indemnity for such expenses.
Our Certificate of Incorporation and Bylaws provide that we shall
indemnify our directors, and officers, employees and agents to the extent and in
the manner permitted by the provisions of the laws of the State of Delaware, as
amended from time to time, subject to any permissible expansion or limitation of
such indemnification, as may be set forth in any stockholders' or directors'
resolution or by contract.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling Ramp pursuant
to the foregoing provisions, we have been informed that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file reports, proxy statements, information statements and other
information with the SEC. You may read and copy this information, for a copying
fee, at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on its
public reference rooms. Our SEC filings are also available to the public from
commercial document retrieval services, from the American Stock Exchange and at
the web site maintained by the SEC at http://www.sec.gov.
We have filed the Registration Statement under the Securities Act, with
respect to the securities offered pursuant to this prospectus. This prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is made to the
Registration Statement and the exhibits filed as a part thereof, which may be
found at the locations and website referred to above.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission (the "SEC") allows us to
"incorporate by reference" into this prospectus the information we file with the
SEC, which means that we can disclose important information to you by referring
to those documents. The information incorporated by reference is an important
part of this prospectus. We incorporate by reference the following documents we
filed with the SEC:
o Our Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 2004, filed on August 16, 2004;
o Our Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2004, filed on May 17, 2004;
o Our Annual Report on Form 10-K for the fiscal year ended December
31, 2003, filed on April 14, 2004;
o Our Current Report on Form 8-K, filed on September 17, 2004;
o Our Current Report on Form 8-K, filed on September 13, 2004;
o Our Current Report on Form 8-K, filed on August 11, 2004;
o Our Current Report on Form 8-K, filed on July 20, 2004;
o Our Current Report on Form 8-K, filed on June 9, 2004;
o Our Current Report on Form 8-K/A, filed on January 26, 2004;
o Our Definitive Proxy Statement to Shareholders, dated April 4, 2003;
and
o Our Definitive Proxy Statement to Shareholders, dated November 6,
2003.
We are also incorporating by reference all additional documents that we
may file with the Commission under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act prior to the termination of this offering.
If you are a stockholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through the Commission
or us. Documents incorporated by reference are available from us without charge,
except exhibits, unless we have specifically incorporated by reference an
exhibit into a document that this prospectus incorporates. Stockholders may
obtain documents incorporated by reference into this prospectus by requesting
them in writing or by telephone from:
Ramp Corporation
Investor Relations
33 Maiden Lane
New York, New York 10038
(212) 440-1500
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LEGAL MATTERS/INTERESTS OF COUNSEL
The validity of the shares of common stock offered hereby will be passed
upon for us by Jenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405
Lexington Avenue, New York, New York 10174. Pursuant to the Fee Payment
Agreement, Martin Eric Weisberg, Esq., an accredited investor and a partner at
the law firm of Jenkens & Gilchrist Parker Chapin LLP, was issued 4,000,000
shares of our common stock for the benefit of Jenkens & Gilchrist Parker Chapin
LLP as payment for legal services previously rendered and to be rendered to us
by Jenkens & Gilchrist Parker Chapin LLP in connection with representation on
our general corporate and securities matters, including the sale of the notes
and warrants pursuant to the Note Purchase Agreement. We agreed to register the
shares of common stock on a registration statement (of which this prospectus is
a part).
EXPERTS
Our consolidated financial statements as of and for the year ended
December 31, 2003 appearing in our 2003 Form 10-K have been audited by BDO
Seidman, LLP, an independent registered public accounting firm, as stated in
their report appearing therein which contained an explanatory paragraph
indicating that substantial doubt exists as to the Company's ability to continue
as a going concern, and have been incorporated herein by reference in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
Our consolidated financial statements as of December 31, 2002, and for
each of the two years in the period ended December 31, 2002 appearing in our
2003 Form 10-K have been audited by Ehrhardt Keefe Steiner & Hottman PC, an
independent registered public accounting firm, as stated in their report
appearing therein, and have been incorporated herein by reference in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
The financial statements of The Duncan Group, Inc. (d/b/a Frontline
Physicians Exchange) as of and for the years ended December 31, 2002 and 2001,
appearing in our current report on Form 8-K/A, filed on January 26, 2004, and in
our current report on Form 8-K, filed on June 9, 2004, were audited by BDO
Seidman, LLP, an independent registered public accounting firm, as stated in
their report appearing therein, and have been incorporated herein by reference
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
27
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We have not authorized any dealer, salesperson
or any other person to give any information or to
represent anything other than those contained in this
prospectus in connection with the offer contained
herein, and, if given or made, you should not rely
upon such information or representations as having
been authorized by Ramp Corporation. This prospectus
does not constitute an offer of any securities other
than those to which it relates or an offer to sell, or 110,741,046
a solicitation of an offer to buy, those to which it SHARES OF COMMON STOCK
relates in any state to any person to whom it is not
lawful to make such offer in such state. The delivery
of this prospectus at any time does not imply that the
information herein is correct as of any time after the
date of this prospectus.
TABLE OF CONTENTS RAMP CORPORATION
Page
----
PROSPECTUS SUMMARY 3
RECENT DEVELOPMENTS 4
RISK FACTORS 5
FORWARD-LOOKING STATEMENTS 15
USE OF PROCEEDS 15
DESCRIPTION OF THE TRANSACTIONS 15
SELLING STOCKHOLDERS 18
DESCRIPTION OF SECURITIES 22
PLAN OF DISTRIBUTION 23 ____________
INDEMNIFICATION OF OFFICERS AND DIRECTORS 25
WHERE YOU CAN FIND MORE INFORMATION ABOUT US 25 PROSPECTUS
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 26 ____________
LEGAL MATTERS/
INTERESTS OF COUNSEL 27
EXPERTS 27
September 28, 2004
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